{"id":15709,"date":"2023-05-29T10:00:58","date_gmt":"2023-05-29T15:00:58","guid":{"rendered":"https:\/\/www.junglescout.com\/?p=15709"},"modified":"2024-03-25T18:12:15","modified_gmt":"2024-03-25T23:12:15","slug":"amazon-acos-why-its-important","status":"publish","type":"post","link":"https:\/\/www.junglescout.com\/blog\/amazon-acos-why-its-important\/","title":{"rendered":"Mastering Amazon ACoS in 2024: Strategies to Maximize Your ROI"},"content":{"rendered":"<!DOCTYPE html PUBLIC \"-\/\/W3C\/\/DTD HTML 4.0 Transitional\/\/EN\" \"http:\/\/www.w3.org\/TR\/REC-html40\/loose.dtd\">\n<html><body><p><span style=\"font-weight: 400;\">When you&rsquo;re measuring your performance on Amazon, advertising cost of sale (ACoS) is one of the most important metrics to keep track of. <\/span><span style=\"font-weight: 400;\">It can determine the effectiveness (or ineffectiveness) of your advertising campaigns, and impact how well you&rsquo;re scaling towards your business goals.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here&rsquo;s a quick look at how you should interpret ACoS on Amazon, how to calculate it, and the steps you can take to lower your ACoS and make your advertising campaigns more efficient.<\/span><\/p>\n<ul>\n<li><a href=\"#what\">What is Amazon ACoS?<\/a><\/li>\n<li><a href=\"#how\">How to calculate ACoS on Amazon<\/a><\/li>\n<li><a href=\"#good\">What is considered a good ACoS?<\/a><\/li>\n<li><a href=\"#lower\">How to lower ACoS<\/a><\/li>\n<\/ul>\n<h2 id=\"what\"><b>What is Amazon ACoS?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">ACoS stands for advertising cost of sales and is a key metric used to measure the profitability of <\/span><a href=\"https:\/\/www.junglescout.com\/blog\/amazon-advertising-guide\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Amazon Advertising<\/span><\/a><span style=\"font-weight: 400;\"> campaigns. It is calculated by dividing the total amount spent on advertising by the total amount of sales generated from those ads.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, if you spend $100 on advertising and generate $200 in sales, your ACoS would be 50%.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A lower ACoS is generally considered to be better, as it indicates that you are spending less money on advertising to generate the same amount of sales. However, the ideal ACoS will vary depending on your product costs, advertising goals, and budget.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are a number of factors that can affect your ACoS, including:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The competitiveness of your product category<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The quality of your product listings (which affects your <\/span><a href=\"https:\/\/www.junglescout.com\/blog\/increase-amazon-conversion-rates\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">conversion rate<\/span><\/a><span style=\"font-weight: 400;\">)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The relevance of the keywords being targeted in your ad campaign&nbsp;<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">You can improve your ACoS by optimizing your product listings, targeting relevant keywords, and paying attention to your competition. You can also experiment with different <\/span><a href=\"https:\/\/www.junglescout.com\/blog\/amazon-ppc-best-practices\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">bidding strategies<\/span><\/a><span style=\"font-weight: 400;\"> to find what works best for your products.<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">To find relevant, high-search volume keywords for your listings and ad campaigns, check out <\/span><\/i><a href=\"https:\/\/www.junglescout.com\/features\/keyword-scout\/\" target=\"_blank\" rel=\"noopener\"><i><span style=\"font-weight: 400;\">Keyword Scout<\/span><\/i><\/a><i><span style=\"font-weight: 400;\">.&nbsp;<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">ACoS is an important metric to track, as it can help you to make informed decisions about your Amazon advertising campaigns. By understanding your ACoS, you can identify areas to improve your profitability and maximize your advertising budget.<\/span><\/p>\n<h2 id=\"how\"><b>How to calculate ACoS on Amazon<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Simply put, <\/span>ACoS is calculated using the following formula:<b> <\/b><\/p>\n<p><b>ACoS = 100 x ( [total ad spend] &divide; [total sales] )<\/b><\/p>\n<p><span style=\"font-weight: 400;\">In other words, if you spend $50 on advertising and it results in a single sale of $100, your ACoS would be 50%:<\/span><\/p>\n<p><strong>100 x (<b>[50] &divide; [100]<\/b>) = 100 x 0.5 = 50%<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">Using Jungle Scout&rsquo;s <\/span><a href=\"https:\/\/www.junglescout.com\/features\/advertising-analytics\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Advertising Analytics<\/span><\/a><span style=\"font-weight: 400;\"> tool, you can track and monitor key metrics like total sales, ACoS, and <\/span><a href=\"https:\/\/www.junglescout.com\/blog\/amazon-tacos\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">TACoS (Total Advertising Cost of Sale)<\/span><\/a><span style=\"font-weight: 400;\"> to see the effect your advertising has on your organic sales.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">TACoS (total advertising cost of sales ) is a metric that accounts for all of your Amazon sales revenue, ad sales and organic sales, while advertising cost of sales (ACoS) only accounts for the sales that are attributable to your ads.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This means your ACoS will always be higher than your TACoS because it only accounts for a portion of your total sales.<\/span><\/p>\n<p><b>READ MORE | <\/b><a href=\"https:\/\/www.junglescout.com\/blog\/amazon-tacos\/\" target=\"_blank\" rel=\"noopener\"><b>What Is Amazon TACoS (Total Advertising Cost of Sale)?<\/b><\/a><\/p>\n<h2 id=\"good\"><b>What is considered a good ACoS?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Generally speaking, a low ACoS is a <\/span><i><span style=\"font-weight: 400;\">good <\/span><\/i><span style=\"font-weight: 400;\">ACoS. However, what you determine as &ldquo;low&rdquo; may vary by product and your goals.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The lower your ACoS, the less you&rsquo;re spending on advertising for that sale. That means your campaigns and keyword targeting are efficient. A higher ACoS, on the other hand, can mean your advertising campaigns are inefficient, possibly due to irrelevant keywords or campaign structure.<\/span><\/p>\n<h4><b>With that said, here are some general ACoS benchmarks:<\/b><\/h4>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>A low ACoS is under 25%.<\/b><span style=\"font-weight: 400;\"> If you&rsquo;re under 25% for ACoS, then conversions are high for that keyword or product. You may want to consider raising your bid to increase clicks and overall traffic for that term\/product.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>An average ACoS is between 25% to 40%.<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>A high ACoS is above 40%<\/b><span style=\"font-weight: 400;\">. This might happen when a specific keyword is gaining a lot of traffic, but has a low conversion rate. This represents a good opportunity to rethink the keywords you&rsquo;re currently bidding on.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Now keep in mind that if your ACoS is high, it does not necessarily mean your product or business is unprofitable. Sellers must also be aware of their TACoS (total advertising cost of sale) to measure the effectiveness of their ad campaigns and organic sales.<\/span><\/p>\n<h2 id=\"lower\"><b>How to lower ACoS<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">One thing we commonly hear from sellers is, <\/span><i><span style=\"font-weight: 400;\">&ldquo;I want to achieve improvements in both volume (increasing orders\/revenue) and [Return on Investment] (decrease ACoS) &ndash; and I want to accomplish this quickly!&rdquo;<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">However, volume and efficiency can be competing goals. Working towards one can undermine the success of the other.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For that reason, you need to ask yourself: A<\/span>re my goals growth-based (volume) or ROI-based (efficiency)?<\/p>\n<p><span style=\"font-weight: 400;\">For example, if you&rsquo;re launching a new product, you might sacrifice profitability for volume and speed. The goal during launch is usually to get as many eyes as possible on your product. You&rsquo;re trying to build awareness quickly, contributing to a higher ACoS.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Conversely, if you are on a tight budget and need to hit revenue targets, you want to get your ACoS as low as possible. You want to make the most efficient use of your marketing dollars on Amazon.&nbsp;<\/span><\/p>\n<h3><b>More ways to lower your ACoS on Amazon:<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Adjust your keyword bids to ensure you aren&rsquo;t paying too much per click.&nbsp;<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Adjust your product or keyword targeting to ensure you&rsquo;re reaching a relevant audience.&nbsp;<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Remove poor-performing keywords and add them as negative keywords so your product doesn&rsquo;t appear in search for that keyword.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Optimize your <\/span><a href=\"https:\/\/www.junglescout.com\/features\/listing-builder\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">product listing copy<\/span><\/a><span style=\"font-weight: 400;\"> and <\/span><a href=\"https:\/\/www.junglescout.com\/blog\/amazon-product-images\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">images<\/span><\/a><span style=\"font-weight: 400;\"> to improve conversions.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">To learn more about optimizing your Amazon PPC campaigns, check out this YouTube video:<\/span><\/p>\n<p class=\"embed-responsive embed-responsive-16by9\"><iframe loading=\"lazy\" title=\"The Ultimate Guide to Amazon PPC | Creating &amp; Optimizing Sponsored Product Ads (2023)\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/BEjdvDc-v5M?start=1&amp;feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen class=\"embed-responsive-item\"><\/iframe><\/p>\n<h2><b>What is your ACoS on Amazon?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">ACoS is an important metric for evaluating the success of your advertising campaigns on Amazon. But it&rsquo;s equally important to view your ACoS in the context of your overall goals.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For sellers who want to grow quickly, or build awareness for a product listing by driving traffic to it, a higher ACoS is inevitable.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, if your goal is to minimize wasted ad spend and hit ROI targets, then lowering your ACoS is possible. By adjusting bids for keywords or product targeting that aren&rsquo;t converting efficiently, you can lower your costs.<\/span><\/p>\n<p><b>To sum it all up:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A <\/span><i><span style=\"font-weight: 400;\">good <\/span><\/i><span style=\"font-weight: 400;\">ACoS is relative to your marketing and business goals.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A high<\/span> <span style=\"font-weight: 400;\">ACoS is acceptable if your goals are volume and speed for faster growth.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">If you want to lower your ACoS for efficiency goals, you need to adjust bids for low converting keywords.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Total profitability &gt; Lower ACoS.<\/span><\/li>\n<\/ul>\n<p>If you&rsquo;ve had success lowering your ACoS on Amazon using alternate methods, please share them in the comment section below. We&rsquo;d love to hear from you!<\/p>\n<p>&nbsp;<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"<p>When you&rsquo;re measuring your performance on Amazon, advertising cost of sale (ACoS) is one of the most important metrics to keep track of. It can determine the effectiveness (or ineffectiveness) of your advertising campaigns, and impact how well you&rsquo;re scaling towards your business goals. Here&rsquo;s a quick look at how&#8230;<br \/><a class=\"js-read-more\" href=\"https:\/\/www.junglescout.com\/blog\/amazon-acos-why-its-important\/\">Read More<\/a><\/p>\n","protected":false},"author":70,"featured_media":15716,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"footnotes":""},"categories":[44,519,807,1],"tags":[1695,1673,1394],"customer-segment":[1609],"content-type":[1424,1410],"topic":[1445,1446,1447,1455,1456],"feature":[],"product":[],"seller-activity-pain-point":[1505,1516],"persona":[1478,1484],"customer-type":[],"data":[],"other-tag":[1554,1564],"business-model":[],"platform":[1427,1494],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.9 (Yoast SEO v24.5) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>ACoS on Amazon: How to Calculate &amp; Maximize Your ROI in 2024<\/title>\n<meta name=\"description\" content=\"Your Amazon advertising cost of sale (Amazon ACoS) is one of the most important metrics to keep track of. Click to learn how to lower yours.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.junglescout.com\/blog\/amazon-acos-why-its-important\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ACoS on Amazon: How to Calculate &amp; Maximize Your ROI in 2024\" \/>\n<meta property=\"og:description\" content=\"Your Amazon advertising cost of sale (Amazon ACoS) is one of the most important metrics to keep track of. Click to learn how to lower yours.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.junglescout.com\/blog\/amazon-acos-why-its-important\/\" \/>\n<meta property=\"og:site_name\" content=\"Jungle Scout\" \/>\n<meta property=\"article:published_time\" content=\"2023-05-29T15:00:58+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-03-25T23:12:15+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.junglescout.com\/wp-content\/uploads\/2019\/06\/acos-e1561061544967.png\" \/>\n\t<meta property=\"og:image:width\" content=\"750\" \/>\n\t<meta property=\"og:image:height\" content=\"392\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Brian Connolly\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Brian Connolly\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.junglescout.com\/blog\/amazon-acos-why-its-important\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.junglescout.com\/blog\/amazon-acos-why-its-important\/\"},\"author\":{\"name\":\"Brian Connolly\",\"@id\":\"https:\/\/www.junglescout.com\/#\/schema\/person\/b2a9447876029d55222400b10b6b2cd5\"},\"headline\":\"Mastering Amazon ACoS in 2024: Strategies to Maximize Your ROI\",\"datePublished\":\"2023-05-29T15:00:58+00:00\",\"dateModified\":\"2024-03-25T23:12:15+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.junglescout.com\/blog\/amazon-acos-why-its-important\/\"},\"wordCount\":1130,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.junglescout.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.junglescout.com\/blog\/amazon-acos-why-its-important\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.junglescout.com\/wp-content\/uploads\/2019\/06\/acos-e1561061544967.png\",\"keywords\":[\"beauty trends on Amazon\",\"ecommerce\",\"Selling on Walmart\"],\"articleSection\":[\"Accounting &amp; Finance\",\"Amazon Seller\",\"Email Marketing\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.junglescout.com\/blog\/amazon-acos-why-its-important\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.junglescout.com\/blog\/amazon-acos-why-its-important\/\",\"url\":\"https:\/\/www.junglescout.com\/blog\/amazon-acos-why-its-important\/\",\"name\":\"ACoS on Amazon: How to Calculate & Maximize Your ROI in 2024\",\"isPartOf\":{\"@id\":\"https:\/\/www.junglescout.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.junglescout.com\/blog\/amazon-acos-why-its-important\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.junglescout.com\/blog\/amazon-acos-why-its-important\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.junglescout.com\/wp-content\/uploads\/2019\/06\/acos-e1561061544967.png\",\"datePublished\":\"2023-05-29T15:00:58+00:00\",\"dateModified\":\"2024-03-25T23:12:15+00:00\",\"description\":\"Your Amazon advertising cost of sale (Amazon ACoS) is one of the most important metrics to keep track of. 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